Oil Theft and Collapse of the Nigerian Rentier State
Jibrin Ibrahim, Deepening Democracy Column, Daily Trust, 16th September 2022
On Tuesday, Thisday newspaper carried a disturbing headline. Nigeria’s petrol subsidy bill is skyrocketing this year and by the end of December, the total bill would be $9.8 billion. This would exceed the total expenditure by all the states of the federation in 2021. This information is in a new report by a member of President Muhammadu Buhari’s Economic Advisory Council and Chief Executive Officer of Financial Derivatives Company Limited (FDC), Mr. Bismarck Rewane. Meanwhile the Nigerian National Petroleum Company Limited (NNPCL) has come out to confess that its revenue has collapsed due to massive crude oil theft.
With oil theft and illegal bunkering taking as much as 400,000 barrels per day of the country’s oil production, Rewane said as much as $1.2 billion was lost to the menace every month, which was the combined budget of Osun, Ekiti and Kwara in 2021.
The Rewane report adds that between 2015 to 2020, $5.5 billion was spent on subsidy, in 2021 alone it went up to $3.8 billion, and $6.2 billion in just the first quarter of 2022. There is no other word for it but madness. Nigeria in its moment of greatest need due to the collapse of revenue inflows, is suddenly bloating figures of petrol imports and subsidy. As it has no money to pay, it is borrowing massive amounts of money to pay subsidy for petrol, most of it bogus. Attempts by the National Assembly to establish what exactly is Nigeria’s average daily petrol consumption has been obfuscated by NNPCL, Ministry of Finance and the Central Bank. The Nigerian Government is behaving like pirates raiding a ship, carrying all the valuables and then sinking the ship as they return to their ship. In our case however, what is being destroyed is Nigeria and very clearly, those in charge will loot everything, including the future wealth of our grandchildren, which they have already mortgaged and most likely move to Dubai after jumping ship.
Massive theft at the federal level is replicated at the state level. Many state governments continued to pile up debts and stealing the borrowed money they are getting in. They do not even bother to pay salaries. State Governors today live between Abuja and their foreign primary homes and hardly visit the states they are supposed to be governing. They have chosen their camp and it is not they state they are supposed to be ruling.
The federal government recently put the current daily spend on maintaining the petrol subsidy at N18.4 billion for 2022.
The Director General of the Budget Office of the Federation, Mr. Ben Akabueze, in an interview, suggested that Nigeria might seek relief from the International Monetary Fund (IMF) if it was unable to address its fiscal challenges. The whole world knows about Nigeria’s madness of allowing state sponsored pirates to take over its petroleum production and exports while massively borrowing new money for the same Pirates to steal from. Why would any rational institution come into this crazy trap? When the history of this madness is written, the present regime’s economic management team would rise to infamy for continuously asserting we are an under-borrowed country and can continue along the path leaving the deadly legacy to our grandchildren. Maybe it is befitting that the Nigerian state is today reliant on a militant, Mr. Government Ekpemupolo, also known as Tompolo, who got a $1.08 billion to stop the theft. Why not, after all, his name is Government.
Nigeria today has the 25th highest inflation rate in the world, with price rises mainly driven by higher energy and food prices. The naira had lost at least 94.87 per cent of its value in five years, crossing N715/$, before falling to N645/$ recently, and now trading at N703/$. Last week, the Organisation of Petroleum Exporting Countries (OPEC) and its allies slashed Nigeria’s production for the month by 4,000 barrels per day, to 1.826 million bpd, as against the 1.830 million bpd allocated in September. But Nigeria had even before then been unable to meet all of its production allocation, hitting just 1.083 million bpd in the July assessment and falling even lower to 972,000 barrels in August says the Rewane report.
A rentier state is one that is dependent on a narrow single extractive source of revenue such as crude oil. Such states are totally dependent on that source and in normal situations would do everything in their power to protect it. The Nigerian ruling class is so irresponsible that it is unable, maybe unwilling to protect its source of revenue. A few weeks ago, a super tanker with capacity to carry three million litres of crude was discovered and an alert sent to arrest it. It allegedly escaped as if it was a small speed boat carrying 100 litres of crude. For a super tanker like that to allegedly escape, it must have the support of the political and security hierarchy in addition to the NNPCL authorities that certify legitimate carriers.
What this means is that within the establishment, there is no one working to serve the interests of Nigeria. For the pirates that are ruling and ruining our country, their commitment to stealing all our resources is that only thing that matters. They are comforted by the knowledge that there is no sheriff in town to question or checkmate their activities. It is very clear where the current dynamics are leading the Nigerian state to – collapse and dismemberment. The onus is on us, 200 million citizens, to elect the government we deserve that can engage the path of salvation and reconstruction. The consequences of state collapse are too serious to accept for the largest population of Black people in the world.
So, the state cannot secure a single means of its survival?
The Pharoah could not extract grains from peasants, but he wanted a pyramid as its tomb.
I have been asking you the same question for years: why are you committed to this democracy?
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Opinion on the issue of Liberal Democracy
I concur with Jibrin on the matter of Liberal Democracy. If anyone has a better system that will work for Nigeria and Africa, please suggest it. I, and other political scientists, will be open to analyzing it.
Indeed, to paraphrase Sir Winston Churchil;
“Democracy is a problematic system of governance, except that we are yet to come up with a better model.”
I have expressed my opinion on liberal democracy in this forum. Therefore, I will not flog a dead horse on the issue.
I would suggest, however, that we should be less concerned with nomenclature–i.e.,liberal, social, consociational, and “WAZOBIA” democracy, just to list a few. Indeed, what is in a name? Rather, I would suggest that we review the characteristics of the framework–liberal democracy or “Wazobia” democracy to see how efficacious each might be for the Nigerian (or African) system.
In my view, Liberal Democracy has not worked in the Nigerian case because of the character of some of our unpatriotic political actors who act on the basis of the “law of self-interest.” They frequently ignore the legal praxis of Liberal Democracy because of their quest for power, money, and fame. Witness, for example, the messy situation within the People Democratic Party (PDP) since its convention (within the context of the party’s constitution). Are most of the politicians interested in the country and its hungry citizens? I don’t think so.
If you are interested, please read: E. Ike Udogu, Democracy in Africa: Fiction or Fact (A paper presented in Budapest, Hungary, in May 2016).
Have a great weekend, y’all!
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Great response. Here are some challenges:
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On Sep 18, 2022, at 9:31 AM, Moses Ebe Ochonu <meoc...@gmail.com> wrote:
My definition of intellectual laziness may be wrong, but it seems to me that the African scholar who dogmatically, uncritically, sheepishly, and lazily accepts, defends, and parrots the universal superiority of a liberal democratic order invented and developed in the West for the needs of Westerners and in conformity with their experience and history is more qualified to be described as intellectually lazy than the African who critiques this system, pushes Africans to free themselves from the yoke of this dysfunctional liberal democratic imposition, and challenges Africans claiming political science expertise and training to craft an African democratic alternative or set of alternatives to an alien and ill-fitting form of democracy that Africans embraced uncritically at a moment of weakness and neoliberal blackmail.Toyin Adepoju, don't fall into the trap of Manichean thinking or into the false dichotomy of liberal democratic salesmen. To critique liberal democracy in Africa is not to say democracy is unsuitable to Africa or that Africans are undemocratic. In fact it is to say the opposite, that Africans have always been democratic, and had democratic systems and institutions before the encounter with the white man, before the post-Cold War neoliberal imposition of liberal democracy on Nigeria and other economically desperate African countries in exchange for Western patronage, loans, and other rescue packages. It is to say that, there were and are African forms of democratic practice that can and should serve as the building blocks of African democracy that would be more suited to countries of the continent than this borrowed system.That the adoption of liberal democracy in the 1990s and 2000s in Africa was preceded by dictatorial and authoritarian regimes is itself another proof of the neocolonial Cold War manipulation of African political spaces as both the Western and Eastern Cold War blocs cultivated, incubated, and propped up so-called strong man rule, a.k.a military and authoritarian rule, for their own purposes. It is one of the enduring ironies of the so-called "democratization" of Africa in 1990s and 2000s Africa that Africans' pro-liberal democracy activism was in part a response to and backlash against decades of authoritarian rule sponsored and sustained by the same Western countries now purportedly wanting to introduce "democracy" to "undemocratic" Africans allegedly socialized into militarism and authoritarianism.Someone infected you with a disease that was alien to your body (despotism), to your lineage, and now claims that that disease is endemic to your society and that they have the cure (liberal democracy). Do you see the problem? Instead of rejecting this racist theory of the endemicity of despotism in Africa and coming up with African democratic alternatives that draw upon African political histories and cultures, some Africans agree with both the Western diagnosis (Africans are undemocratic) and the Western cure (liberal democracy). Not only that, they have become the most fanatical evangelists for this political ideology.There are different kinds of democracy, and liberal democracy is just one of them, one iteration. We're trying to provincialize liberal democracy, while people like Jibrin and his Western "pro-democracy" friends are trying to universalize it.One form of democracy is not superior to the other. Nor, as Ken said, does any form of democracy guarantee good governance. This is contrary to the claims of the propagators of liberal democracy and its core ideas of periodic, one-man-one-vote, winner-takes-all elections. They claim falsely that it is superior and that, unlike other modes of democratic governance, it leads to prosperity and humane, equitable, and accountable governance. Heck, Francis Fukuyama even claimed that liberal democracy was the end of history--the highest form of human political evolution!Democracy is not a monolithic idea. It is an umbrella term, an ideational empty vessel. The core principles are legitimacy, accountability, representation, and participation. You can achieve all or most of these democratic principles through different routes, not just through the liberal democratic route, which has proved incapable of leading to these ideals in Africa. By contrast, African polities in precolonial times had all these elements. These polities had no universal suffrage or winner-takes-all electoral contests, or periodic elections on the principle of individual suffrage. And yet they were inherently democratic in different ways.No need to rehash what we all already know about these systems, but the point is that you can have democracy without elections, and there is a vibrant branch of political theory with a vast literature on the concept of democracy without elections. You can get to it with a simple google search.Some countries have selections or elections based on community gatherings and townhall caucusing and not elections. Some countries have elections for some offices but not for others (Iran). Some others have constitutional monarchies or non-constitutional monarchies with locally elected officials. etc etc. Some have republican assemblies of appointed or selected representatives, etc etc. Why can't we Africans come up with our own kinds of democracy that reflects our histories, experiences and the sociological peculiarities of our various countries and peoples?That takes me into the realm of African alternatives to this dysfunction and unsuitable liberal democracy. I have in a couple of recent publications and conference papers proposed alternative systems as a provocation for further discussion, debate, and refining reflection. If Jibrin wasn't so dogmatic and beholden to liberal democracy and was open-minded and willing to have a good fatih debate about the many democratic alternatives and possibilities available to us, I would put those ideas here.Nimi Wariboko, a prolific philosopher and a member of this group has proposed several thought-provoking alternatives to the expensive, divisive, and increasingly meaningless zero-sum elections in Nigeria, notably the drawing of lots. He has been pushing alternative political imaginations and forms in his more recent publications. As we speak, he is working on a project that makes further provocations in this direction.African political history is a rich reservoir of systems that provide us with raw materials with which to think and innovate our way out of this liberal democratic quagmire and into more suitable African democratic forms. We need not remain in this mess, this madness, to use Jibrin's own characterization, of liberal democracy.
Re - “if the swedish model of social democracy is not enough for a provisional answer, we have to ask, what is going on in sweden or denmark that they are so hostile to immigrants, so much that sweden would accept neonazis in their new ruling coalition.”
There are others in this forum such as Baba S. Kadiri who are infinitely better positioned to comment on the above. I have been learning a lot from him about these matters…
They call themselves " Sweden Democrats"
From a Christian charitableness point of view, immigration would normally imply "the more the merrier", but for some people, racism is at the top of the agenda - they believe that everything begins and ends in or with racism
From time to time I take a look at Spectator statistics: Sweden
Suffice it to say that everything that’s supposedly going wrong with the country is being blamed squarely on immigrants: Gang Criminality and gun violence, lower scores on the PISA scale etc etc etc are mostly being blamed on immigrants
In today’s Sweden, immigrants are the scapegoats
But some studies have shown that on the whole, immigrants make substantial contributions to the Swedish economy contrary to what the hate campaigners/hate mongers say, that immigrants are a burden to taxpayers, that immigrants are merely freeloaders and parasites on the Swedish welfare system and should be sent packing back to where they came from. And of course, those who are useful citizens and would like to remain should adapt and integrate - culturally, whether they are black or blue...
In some other areas too, it’s beginning to look like things are going from bad to worse than right now., even if the criminals must be the most unhappy about the election results because when the new government takes shape they will have no alternative other than taking some harsh - more really drastic measures against the criminals or fail in their promises to do so
The fallout from the Sweden Democrats' Linus Bylund joking about "journalist rugby" suggests that press freedom that’s such a vital ingredient in any democracy could soon be in danger in Sweden - "journalist rugby" is being interpreted to mean that they (the Sweden Democrats) intend “to deal with journalists” who overstep their ( the Sweden Democrats) red lines or step on their ( the Sweden Democrats’) toes. This of course will give rise to a kind of satire and satirical writing that they are not yet familiar with since when they cut their blue and yellow teeth on something as effete as “Gulliver's Travels”
1956 - Soviet into Hungary resulted in many Hungarian refugees to Sweden
1968: Polish Pogroms against Jews resulted in many Polish Jewish refugees to Sweden
Here are Sweden's election results for 1970, 1970 when we ( Better Half & me) were in Sweden for a three months honeymoon and then back to Ghana. The following year when I took up permanent residence here, a kind Swedish man biked me over Västerbrön on his moped and once we got to the other side, stopped at a roadside kiosk to buy me a litre of milk, which cost a Swedish Krona ( about ten cents back then) and insisted that I drink it all up. I was looking so thin, he was sure that I was one of the starving urchins recently escaped from Biafra, and I was so impressed by his kindness that I downed the litre of milk on the spot. Then he drove and deposited me at the front door of Pokalvägen 3, in Reimersholme where Better Half and I lived. Kai and Eva-Britt Henmark (Jewish) and their children Tobias and Matilda were our neighbours. Great neighbours. Back then, anti-Semitism existed ( of course ) and the Swedish word for it was antisemitismen and Judehate ( hatred of Jews). In the 1973 Yom Kippur War, (by then Eva-Britt’s brother Arne Lapidus was reporting for Expressen) my impression, such as it was back then, was that the Social Democrats and most of Sweden were solid with Israel, and that was of course, long before Sten Andersson started showing some other kind of colour - like Haman - as he morphed and metamorphosed into Sten Andersson vs Israel. Fast forward that trend and you have it culminating in the Margot Wallström vs Israel debacle. Ann Christin Linde has since changed that awful melody, thank GOD!
Back in the day, 1970 - 1973 there was no islamophobia ( in Swedish “Islamophobi” ) for the simple reason there were hardly any Muslims in the country - but since then there has been what the Sweden Democrats have been quick to label “ unbridled and unfettered Muslim immigration” in the past fifty years, Muslim refugees arriving with Muslim culture and lifestyle from Yugoslavia, Albania, Iran, Iraq, Azarbaijan Turkey, the Middle East, North Africa, Pakistan. Bangladesh, India, South Africa, East Africa, Eritrea, Ethiopia, Sudan, Somalia, Chechnya, and the former Muslim Soviet Republics such as Uzbekistan,... here are some facts : Sweden: statistics on where immigrants come from - per country
The landscape changed gradually; since the 1970 Elections.
I think that the major change began with the 1974 - 1975 oil crisis precipitated by OPEC - overnight the cost of everything more than doubled.
Here's democracy at work. Peaceful elections, especially in digitalized Sweden :
The mother of all elections: the 2022 Swedish general election
In this 2022 General Elections, The Swedish Social Democratic Party under the able leadership of Magdalena Andersson achieved the most spectacular results, and, normally should be forming the next government, but the so-called “ New Conservatives” who had said that they would not have anything to do with the Sweden Democrats, reneged on their promise and not only that, the Sweden Democrats are now bigger than them and are the Kingmakers. They will soon be throwing their weight around - it could turn out to be some kind of blackmail when they present this kind of alternative to Mister Kristerson: Either you do as we say or we bring your government down “ - since their party has the majority of parliamentary seats in the fragile government alliance - and as things are, the Sweden democrats will not be given any ministerial positions - Mister Kristerson dare not go that far, because, first of all, the liberals in his alliance would rebel and that would cause Mister Kristerson to kiss goodbye to his prime ministership as, like Humpty-dumpty he comes crashing down and his government with a slim majority of merely three comes crashing down with him….
Two quick points not to derail the thread
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On Sep 19, 2022, at 8:51 AM, 'Mr. E. B. Jaiyeoba' via USA Africa Dialogue Series <usaafric...@googlegroups.com> wrote:
“Non man [or woman] is an island entire of itself…” This axiom is probably truer today than in the past. Commonly, ideas tend to be transpolinational and transfertilizational no matter their source. This has been my experience since I joined Brother TF’s forum at its inception. Yes, I have read with gusto the works of some of the great Nigerian scholars you cited–Alagoa, Ikimi, Dike and Ake. They are, in my judgment, in the Pantheon of Nigeria scholars.
However, I am an ordinary academic who continues to learn, and intends to do so until I exit the scene. This fact, in part, explains why I like expressing my opinion on issues in this forum and elsewhere.
Indeed, I realize that in this moment of discomfiture with the overall development in a country that has all that it takes to be great, it would be difficult not to be explosive in expressing one’s opinion. This is especially so for those of my generation who are nostalgic about the good old days.
In any case, we have a lot of work to do. This is more the case for those of your generation. On the matter of liberal democracy, however, I humbly say “let’s agree to disagree.” Good luck!
Nowadays, in fact for over a decade now, 1st of May demonstrations are a thing of the past, in Sweden. The trade Unions were the main base of the Social Democrats.
I don’t know whether or not “The Swedish Model” at its peak of glory just before Olof Palme was assassinated (February 28, 1986) or as late as Anna Lindh’s assassination (11th September 2003 ) is essentially the same as, or can be conflated as co-terminus with “the swedish model of social democracy “. As many political observers note, the Social Democrats have been progressively moving to the right and now happen to be somewhere near the centre. Furthermore, since the Sweden Democrats started braying about “ unbridled immigration” all the political parties in the wide political spectrum of Swedish politics, to some extent, with the exception of the Left Party, have all moved a lot closer to the Sweden Democrat position about immigration. About just right now, the Sweden Democrats would like to see Zero immigration. and it should surprise you to know that quite a few Black Africans and other immigrants who also say that they love Sweden are loyal members of the Sweden Democrats Party.
Among the Nigerian socialist-type political parties that have a living chance of winning anything, I suppose that Peter Obi’s Labour Party Manifesto possibly has “ The Swedish Model” in mind: “Peace and Happiness throughout the land”,...
But as we know, “the road to hell is paved with good intentions”, so he had better be careful with any serious talk about wanting to “nationalise” anything. In the light of what Jibrin Ibrahim has written about “Oil Theft” the mere idea of divesting those who own their own piece of personal property called “ oil wells” would be anathema to them therefore any talk of nationalizing such oil wells will just play into the hands of Obi’s enemies who will either accuse him of treason or of “communism” - just as they say, the power elite in South Africa were “scared shitless” that with Apartheid over the ANC was going to nationalise everything….
“No man [or woman] is an island entire of itself…” This axiom is probably truer today than in the past. Commonly, ideas tend to be transpolinational and transfertilizational no matter their source. This has been my experience since I joined Brother TF’s forum at its inception. Yes, I have read with gusto the works of some of the great Nigerian scholars you cited–Alagoa, Ikimi, Dike and Ake. They are, in my judgment, in the "Pantheon of Nigerian scholars."
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